Under the Color of State Law

June 2009

Security has become integral to the safe and efficient operation of the modern casino. Casinos across the country and around the world employ thousands of private security officers to patrol their premises, monitor their gaming floor and ensure patron safety. While the importance of these tasks cannot be overstated, the mere fact that they are carried out by casino employees can potentially expose a casino to tort liability that traditionally only applied to state or local governments.

Under federal law, when a casino security officer investigates or detains a patron, the officer and the casino may be considered arms of the state or local police force. As an instrument of the state,a casino can be held liable for the constitutional torts of its employees under 42 U.S.C. § 1983,usually referred to as“Section 1983.”This exposure can be significant—compensatory and punitive damages,as well as attorneys’ fees can be awarded against a defendant that violates Section 1983.1

Liability Under Section 1983

Section 1983 allows private persons to sue for civil damages when their constitutional rights have been violated by a state actor. A plaintiff asserting a Section 1983 claim must prove two elements: 1) that they were deprived of a constitutional right (i.e.,being free from unreasonable searches and seizures under the Fourth Amendment); and 2) that the deprivation was caused by a person acting “under color of state law” (a state actor). This article focuses on the second element because it is often dispositive of liability—if the defendant is not a state actor, there can be no Section 1983 liability.

When is a Private Person Acting Under the Color of State Law?

A private actor may be considered a person acting under color of state law pursuant to Section 1983 when his conduct is “fairly attributable to the state.” The Supreme Court has developed three primary tests to determine when such conduct exists: 1) the nexus test; 2) the public function test; and 3) the state compulsion test. Generally, only the first two tests are applicable when the state actor status of a security officer is at issue.

Courts use the nexus test where both a state actor, usually a police officer, and a private actor were engaged in activity that allegedly violated the plaintiff’s constitutional rights. If the security officer and state actor worked in concert to achieve a common or joint goal, the actions of the security officer will usually be attributed to the state, giving rise to Section 1983 liability. Where only private actors are alleged to have violated the plaintiff’s constitutional rights, the scenario at issue in the cases discussed below, courts generally apply the public function test. Under this test,a private entity will be considered a state actor only if it is exercising powers that are traditionally and exclusively exercised by the state.

Applying the public function test, the Supreme Court has drawn some bright lines—clearly delineating certain types of conduct that will almost always be considered state action. Unfortunately, the Supreme Court has expressly declined to draw any bright lines with regard to private security officers. This has created an unpredictable legal landscape where slight variations in the factual circumstances surrounding a security officer’s actions can lead to strikingly different results. However, three recent decisions involving the MotorCity Casino in Detroit have illuminated some helpful guideposts that should lead to more predictable outcomes—making it easier for casino operators to assess the risk of employing state licensed security officers.

The MotorCity Casino Triumvirate

The MotorCity Casino employs a substantial number of private security officers that,among other things, regularly patrol the gaming floor. Many of MotorCity Casino’s security officers are licensed under Michigan state law as “private security police officers.” By law, these state licensed security officers have the same authority as state police officers to make warrantless arrests, so long as they are “on duty,” in their employer’s uniform and on the employer’s premises.

Romanski v. Detroit Entertainment

In August 2001, Stella Romanski was confronted by a number of state licensed private security officers on MotorCity Casino’s gaming floor because she had violated the casino’s “slot-walking” policy. Romanski was escorted by security personnel to an investigation room where she was detained and questioned on suspicion of theft, and ultimately ejected from the casino. Romanski successfully sued the security officers and MotorCity Casino under Section 1983, alleging that they violated her Fourth Amendment right to be free from unreasonable search and seizure. MotorCity Casino appealed the substantial jury verdict, arguing that neither the officers nor the casino were acting under color of state law.

Relying on the public function test, the Sixth Circuit affirmed the verdict. The court found that previous cases had begun to draw a line in the sand on the issue of security guard liability under Section 1983. This line divided cases in which a private security officer exercised a power traditionally,but not exclusively reserved by the state, such as the shop keeper’s privilege to detain those suspected of criminal trespass (theft), from those cases in which a private security officer exercised a power traditionally and exclusively reserved to the state, such as the police power to make an arrest for any offense. On the side of the line where state law/licensure only grants a security officer powers that are not exclusively held by the state—the shopkeeper’s privilege—there is no state action. On the other side,where the state endows a security officer with a power usually exercised only by the state—plenary arrest power—the security officer will be considered a state actor. The Sixth Circuit felt that this case fell firmly on the state actor side of the line because the licensed security officers that detained Romanski had the same plenary arrest power as state police officers. The court held that when this broad power is given to security officers they should be treated as de facto state police officers under Section 1983, even if the statute limits the geographic scope of the power or the employer prohibits the exercise of such power.

Lindsey v. Detroit Entertainment

The facts and allegations at issue in Lindsey, decided in May 2007 by the Sixth Circuit, are nearly identical to the facts of Romanski, with one key difference—the MotorCity Casino security officers in this case were not licensed under Michigan law. The Sixth Circuit held this difference placed Lindsey on the opposite side of the state action line than Romanski. Unlike the state licensed guards in Romanski, the unlicensed guards here were not vested with the plenary police/arrest power. Thus, when they detained the plaintiffs they could only have been exercising their right to arrest for criminal trespass, a right conferred to all private citizens. Since the security officers were not exercising an exclusive state power, they could not be state actors and were not liable under Section 1983.

Moore v. Detroit Entertainment

In Moore, decided in March 2008 by the Michigan Court of Appeals, a state licensed security officer employed by MotorCity Casino prohibited Douglas Moore from entering the casino because Moore appeared to be intoxicated. A quarrel ensued in which Moore allegedly assaulted the security officer. Thereafter, several more state licensed security officers— and two city police officers—confronted Moore outside the casino. Moore was told that he could either place himself in police custody or enter the casino for questioning. Moore elected to be escorted inside the casino by security personnel, where he was searched and placed in the investigation room for more than two hours. Like the Romanski and Lindsey plaintiffs before him, Moore sued the casino and the security personnel for violating his constitutional rights under Section 1983.

Relying on Romanski and Lindsey, the Michigan Court of Appeals held that because Michigan law granted the licensed security personnel at issue here broad arrest power,both the officers and the casino were acting under color of state law. While the court did stress that merely being licensed by the state or exercising a right conferred by statute does not automatically transform a private security guard’s actions into state action, Moore does reaffirm that where state licensure grants security officers the plenary police power to arrest for any offense, they will be considered state actors. The court believed that this case was an even clearer example of state action than Romanski because the security personnel here arrested a patron for an assault occurring outside the casino as opposed to a theft occurring inside the casino. Thus, there could be no question that the security guards’ authority to arrest Moore came from the state, since a private business only has the authority to arrest for criminal trespass.

Assessing Employer Exposure Under Section 1983

At the outset, it is important to note that the three cases discussed above may have limited precedential value. To date, Romanski and Lindsey, both out of the Sixth Circuit, are the only Court of Appeals decisions addressing this issue. Though these cases provide an indication of where the law in this area may be headed, courts outside the Sixth Circuit are not bound by these decisions,and it is difficult to predict how different circuits may decide this issue. That said, these cases provide the best available road map for assessing a casino’s potential exposure under Section 1983.

The MotorCity Casino Triumvirate makes clear that where a state or local statute confers broad arrest powers upon private security guards, those guards will very likely be considered state actors under Section 1983, regardless of whether the statute or the employer impose time or place restrictions on the exercise of those powers. However,even though a casino policy that restricts the exercise of plenary arrest power will not affect the state actor determination, it may very well insulate the casino from Section 1983 liability. Under Section 1983,a defendant can only be held liable for its own unconstitutional conduct; a defendant cannot be held vicariously liable for the unconstitutional conduct of another. In order for a private corporation to be liable under Section 1983 for the conduct of its employees, the employees must have been acting pursuant to a corporate policy or custom that allows employees to engage in activities that deprive others of their constitutional rights. If corporate policy explicitly prohibits such conduct and the policy is aggressively enforced, the employer will likely not be found liable under Section 1983 for the unconstitutional torts of its employees. Therefore, to reduce potential exposure to Section 1983 liability, a casino may want to adopt a policy that prohibits,or at least significantly restricts, the use of a licensed security officer’s broad arrest powers. Accordingly, a casino’s Section 1983 exposure assessment should focus on a careful and critical review of its security policies, as well as the actual practices of the security officers and managers. Simply having a restrictive policy is not enough to avoid liability. If the security policy of a casino is ignored or if violations of the policy are not promptly and adequately dealt with, a reviewing court may treat the casino’s lack of enforcement as a corporate custom that endorses unconstitutional conduct. Given that the functions that make security officers so invaluable to casinos are the same functions that can expose casinos to extensive liability under Section 1983, casino operators need to be aware of the security officer licensure laws in each jurisdiction where their casinos are located and must be proactive in the evaluation and enforcement of their internal security policies. Casino operators should be aware that state licensure of private security guards is not the only scenario that can create Section 1983 liability, and that even where a casino is not liable under this statute, the casino may still be liable for a security officer’s conduct based on various common law tort theories.